Oil rises due to lower US production growth estimates

By Arathi Somashekhar

(Reuters) – Oil prices rose on Wednesday as U.S. oil production growth is expected to remain largely flat through 2025, easing concerns about excess supply.

Brent crude futures rose 38 cents, or 0.5%, to $78.97 a barrel at 0013 GMT, while U.S. West Texas Intermediate crude rose 41 cents, or 0.6%, to $73.72. There was a slight rise in both contracts on Monday.

The US Energy Information Administration (EIA) said in its short-term energy outlook on Tuesday that US domestic production will not exceed December 2023’s record of 13.3 million barrels per day until February 2025.

The EIA cut its forecast for domestic oil production growth in 2024 by 120,000 barrels per day (bpd) to 170,000 bpd, significantly lower than last year’s output growth of 1.02 million bpd.

US government data on oil inventories will be released later on Wednesday. U.S. crude oil inventories are expected to have risen by 1.9 million barrels last week as production recovered from the freeze and refiners resumed maintenance.[EIA/S]

Meanwhile, US, Qatari and Egyptian mediators have launched a diplomatic effort to bridge differences between Israel and Hamas over a ceasefire plan for Gaza, after the Palestinian group responded to a proposal for an extended pause in fighting and the release of hostages. prepared.

Traders are closely monitoring the situation in the Middle East, especially as attacks on shipping by Iranian-backed Houthi rebels in the crucial Red Sea have disrupted traffic through the Suez Canal, the fastest maritime route between Asia and Europe. route and which sees about 12 routes. % of global oil trade.

(Reporting by Arathi Somashekhar; Editing by Jacqueline Wong)

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